MORTGAGE WATCH 01/21/22

Mortgage Rates have move higher since last Friday. In the past 2 weeks, press coverage of the Federal Reserve’s policy outlook has ramped up significantly.  In addition to tapering, the Fed is now expected to start hiking rates in March and to hike more than previously expected in 2022. If you think that gives you time to get a mortgage before rates go up, think again.

So why did rates spike on Friday?

 This is actually a bit of a trick question.  If you are reading my weekly market updates, you know mortgage rates have been rising in general since late 2020.  The current rate spike really began last week.  The first 4 days of the week were mostly a lull in the bigger picture.  They had a chance to be the start of a bigger reversal, but ultimately revealed themselves to be a breath-catching exercise before more pain.  In other words, it was a trap–at least for anyone hoping that rates would do something better than catch their breath.

The response is varied among mortgage lenders in terms of scope and timing, but on average, 30yr fixed rates are nearly 3/8ths of a point higher in the first 2 weeks of 2022.  Even the notoriously stale but widely-cited Freddie Mac weekly rate survey mostly caught up to reality with their biggest jump since the start of the pandemic

 

Bottom Line: unfortunately the rise of interest appears to be far from over, but we can hold hope the Fed will change its policy direction on January 26th in light of market volatility, geopolitical risks, and the omicron surge.  I am recommending clients lock as soon as escrow opens.

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.